SALEM, OR – The Distilled Spirits Council today slammed a legislative budget proposal in Oregon which includes a hidden alcohol tax that will have consumers paying more per bottle.

The Council claimed the backroom deal violated the very spirit of the state’s prior notice rule for tax hikes and commended the Oregon Liquor Control Commission (OLCC) for not accepting the proposal and calling for additional industry comment.

“Legislators are not pulling the wool over anyone’s eyes here – this is a tax,” said Council Vice President David Wojnar, referring to the 25-cent increase per bottle. “By cutting a secret deal and requesting the OLCC add the money to other agency budgets, legislators have undermined the very spirit of the prior notice rule. This is just a way for legislators to raise taxes on Oregonians while leaving no fingerprints,” Wojnar said, adding that any other tax increase would require a three-fifths majority vote of the Legislature while this backroom deal only requires a simple majority vote of the five-person OLCC.

A recent economic analysis showed that increasing the bottle tax on distilled spirits by 25 cents (a 50% increase) will add to Oregon’s already burdensome spirits tax in which 70% of the typical purchase price for a bottle of spirits in Oregon already goes to taxes of some kind. The analysis also notes that Oregon has the third highest spirits tax rate in the country.

“This is a classic stealth tax and if it moves forward we would urge the OLCC to reject it,” Wojnar said, further noting that such an increase is gratuitous given Oregon’s positive revenue forecast. “Legislators should work on protecting the hospitality industry – not punishing workers with stealth taxes that destroy jobs and send customers across the border to make their purchases.”

Wojnar also said the tax would harm Oregon’s growing craft distilling industry made up of over two dozen small producers.

The prior notice rule requires that before the OLCC raises an alcohol tax, the public should have 45 days to comment as well as a public hearing on the issue. In this case, the OLCC gave the public 45 days and held a public hearing. However, according to Wojnar, legislators undermined the spirit of the prior notice rule by cementing a tax deal and rendering any public OLCC vote meaningless.